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Volume 11, Number 2
March/April 1995

The Numbers Game Yields Simplistic Answers On the Link Between Spending and Outcomes


Does more money for schools equal better academic performance? Newt Gingrich and the Wall Street Journal say no, relying in large part on the work of Eric Hanushek, an economist at the University of Rochester. His often-cited 1989 review of 38 research studies concluded that "there is no strong or systematic relationship between school expenditures and student performance."

Reducing class size—the most expensive change schools have made in recent years to raise achievement—makes no difference, Hanushek argues. He cites figures for rising education expenditures and falling student performance on tests like the S.A.T. and parts of the National Assessment of Educational Progress (NAEP) as further proof that spending more money on education does not in itself lead to better results.

But Larry Hedges and colleagues at the University of Chicago reached exactly the opposite conclusion last year after a new analysis including many of the same studies Hanushek cites. Using what they considered more sophisticated synthesis methods than Hanushek's, they found that "expenditures are positively related to school outcomes" and that class size does make a difference.

This is an excerpt from the Harvard Education Letter. Subscribers can click here to continue reading this article.


For Further Information

For Further Information

W. Cooley. "The Difficulty of the Educational Task: Implications for Comparing Student Achievement in States, School Districts, and Schools." ERS Spectrum 11, no. 3 (Summer 1993): 27-31.

E. Hanushek et al. Making Schools Work: Improving Performance and Controlling Costs. Washington, DC: The Brookings Institution, 1994.

E. Hanushek. "Money Might Matter Somewhere: A Response to Hedges, Laine and Greenwald." Educational Researcher 23, no. 4 (May 1994): 5-8.

Harvard Journal on Legislation 28 (Summer 1991). Special issue on school finance, including articles by Ferguson, Hanushek, Murnane, Charles S. Benson, Martha Minow, and others.

L. Hedges, R. Laine, and R. Greenwald. "Does Money Matter? A Meta-Analysis of Studies of the Effects of Differential School Inputs on Student Outcomes." Educational Researcher 23, no. 3 (April 1994): 5-14.

H. Howe. Thinking About Our Kids. New York: Free Press, 1993.